The U.S. shipbuilding industry continues to design and build the most advanced military vessels in the world. Despite this capability, the industry is not competitive in the world shipbuilding market. The industry has been in decline since the United States withdrew direct shipbuilding subsidies in 1981. The larger, or "first-tier" yards have been unable to compete internationally due to the dedicated industrial policies, greater efficiency, and lower labor rates in other countries. The absence of a robust commercial counterpart to the military shipbuilding sector may prevent these larger yards from operating as efficiently as they could. "Second-" and "third-tier" yards that produce the majority of the ships used in domestic trade have been more innovative, more efficient, and therefore, more successful internationally. However, all shipbuilders must apply modern business practices, processes, and enabling technologies to become more cost-effective and competitive.
Industry Studies 2000